Activity5 Entrep
Activity5 Entrep
Objectives
1. A business plan serves as an overall guide for the business. It guides the
entrepreneur in implementing the plan and serves as a reference of the policies. It
guides the entrepreneur in implementing the plan and serves as a reference of the
policies, operational, technical and financial matters in the actual process of the firm.
2. A business plan serves as a handy means to convince lenders and investors. A well-
written business plan gives lenders and investors an indication of the potential of the
firm and as assurance the business is a worthwhile investment. It will give an
entrepreneur a possibility for a bank loan or financing support in the form of financial
projections.
Characteristics of a Business Plan
Developing a business plan does not necessarily mean putting too much time or
details on the paper. There are some investors who are not interested to read 100-page
plan most especially if the first few pages do not show any value at all.
Author Gilles and Mondejar in their book Guide to Entrepreneurship, they relate
reading a business plan to a book. When a reader gets interested on one section of the
book, he would continue reading it. A business plan must be interesting, factual and
professional to impress an investor and make him read your plan.
Tim Berry, an entrepreneur and business planner, wrote in his article “A Simple
Business Plan”, the most basic characteristics of a business plan. He said “An easy to
read quickly format is more important than ever. If you want people to read the business
plan you develop and most people do… then my advice to you is keep it simple.” He
reminded not to confuse the business plan with a doctoral thesis.
Cover Page
The cover page includes information about the company. It includes:
a. Name of the business
b. Logo of the business
c. Names of the proponents
d. Address
e. Telephone number
f. Email and Website address
g. Date
h. Name of the person who prepared the plan
Table of Contents
The table of contents should list the sections and page numbers of the business
plan and the appendices.
Executive Summary
The executive summary is the brief overview of the entire business plan. It covers
the highlights of the business plan. Although it appears in the beginning of the business
pan, it is prepared after business plan is prepared. Remember that executive summary
is not an introduction or preface to the business plan. It is a summary of the plan itself
and the most important section in the business plan.
The executive summary should include:
a. Purpose
b. Overview
c. Features
d. Financial Requirements
e. Growth
Company Description
The company description gives the reader information about the company and
where it is going. It should also include brief statement about people who runs the
business.
The company summary includes:
a. Name of the business and owner’s name
b. Background
c. History
d. Goals and Objectives
Market Analysis
The market analysis should be able to show entrepreneur have segmented the
market. It presents the highlights of the industry, the list of competitors, the possible
costumers and the existing market.
It is important to include in this section the behavior of the consumers in the firm.
Strategic Plan
The strategic plan describes your plan of action. In this section, it should be able
to identify the details of marketing programs, pricing, distribution, sales, promotion and
advertising, and estimated sales or forecast of the firm.
Financial Analysis
The financial analysis section explains where the capital will come from and how
it will be returned to the investors. It is the financial explanation of the other sections. In
this section, it discusses the projections, breakeven analysis and the amount you will
spend before the venture becomes profitable.
Financial analysis includes the balance sheet, income statement, cash flow
schedule and break-even analysis.
Appendix
The Appendix section shows the supporting documents to make business plan
meaningful. It consists of of the owner’s resume, contacts with the suppliers and clients,
letter of intent, copy of copyright or patent (if applicable).
Quiz 5
A. Identification. Identify the terms being described in the following. Write your answers
on the space provided.
At age 26, Samuel Bugarin established his motor shop along the highway one
kilometer away from the commercial district of his town. He holds degree in Mechanical
Engineering and just after graduation, he started working as an apprentice in his uncle’s
motor shop. He prodded his uncle to expand his business but his advice was not heeded.
He thinks that the motor repair business is growing steadily. He noticed that the
new car models are operated with electronic systems installed in them. Sammy believes
that repair and maintenance of the new car models cannot be served adequately by repair
shops existing in the area.
Sammy immersed himself into learning the care and maintenance of electronic
installations in cars. He also acquired the skills necessary for maintaining efficient
performance of cars. When he thought he already possessed the required training, he
decided to become a motor repair shop entrepreneur.
Sammy stuck to his business plan and the business was very encouraging during
the first three years. On the fourth year of his operation, a new motor repair shop opened
just across the highway from the shop. It was inevitable that some of his customers would
move over to his new competitor. Sammy did not anticipate the threat now confronting
his business. He was already entertaining the idea of putting up another shop at the other
end of the commercial district. But now, it seems that this dream of opening another shop
is slowly drifting away. With the entry of the competitor, he is beginning to lose faith in
the usefulness of a business plan. He is apprehensive and he wants quick advice.
Guide Questions